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Despite the devastating impact the coronavirus pandemic and associated lockdowns have had on many small businesses, a majority of Canadian entrepreneurs are confident they can survive, according to a new study from the Business Development Bank of Canada.
The overwhelming majority — 87 per cent — expressed confidence and, as a second wave takes hold in pockets across the country, many are adapting with changes to help their businesses succeed in the pandemic environment, according to the study that included two surveys with leaders of 1,000 small and medium-size businesses (SMEs).
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Pandemic-driven plans include altering supply chains and increasing local suppliers, adopting new technology and making improvements to online sales capability, the study found. Only four per cent of large SMEs said they did not plan to make any changes to their business practices against the backdrop of the pandemic.
Some of the business trends are new, while others have accelerated, such as increasing investments in technology, according to BDC, a Crown corporation that operates at arm’s length from government.
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The businesses’ plans may be driven, in part, by other study findings, such as that 83 per cent of consumers indicated a willingness to pay more for local products and 56 per cent have made more online purchases since the start of lockdowns aimed at slowing the spread of COVID-19.
“Our findings show that adopting business practices that consider new consumer and work trends can put SMEs back on the track to prosperity,” said Pierre Cléroux, vice-president of research and chief economist at BDC.
He acknowledged that the second wave of the virus this fall is bound to make Canada’s economic recovery “choppy” but he said small businesses are much better prepared than they were in March.
“They’ve been focusing on their business over the last months to become more efficient,” he told the Post. “They’ve found ways to reduce costs and many have adapted to new consumer trends by (for example) increasing their online presence.”
They’ve found ways to reduce costs and have adapted to new consumer trends by (for example) increasing their online presencePierre Cléroux, BDC
The BDC study found small businesses are also focusing on enabling telework, with recent research suggesting 80 per cent of those who have been working remotely plan to continue doing so.
Since the lockdowns began in March, Canadian businesses including those in the small and medium-size and entrepreneurial categories have been buoyed by federal and provincial government programs providing wage and rent subsidies and emergency loans. Workers, meanwhile, have had lost wages replaced. Some of the assistance programs have been renewed, while others have not.
“Government programs have increased available revenue, which in turn has supported the retail sector,” Cléroux said, adding that retail is running at 101 per cent of the pre-COVID-19 level in February because “people are spending, despite loss in revenue coming from other sources, namely work.”
These sectors need continued supportPierre Cléroux, BDC
He added that it will be important to carry on with support for business segments most affected by the pandemic: accommodation and food services, entertainment and tourism.
“These sectors have suffered significantly from COVID-19 restrictions and need continued support,” Cléroux said.
Even with continued aid for the hard-hit hospitality sector, Restaurants Canada warned last week that without additional support an estimated 40 per cent of independent restaurants might not survive beyond next March. That would be on top of roughly 10 per cent of establishments that have already closed permanently.
The industry group is recommending targeted food service sector support, as well as further support to manage labour costs, rising debt and cash flow.
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